Economists have been closely watching the unemployment benefits
report since fears of another recession intensified in August.
Layoffs and applications tend to rise at the beginning of
recessions. The slow decline in applications suggests hiring
remains sluggish but layoffs aren't worsening.

Employers pulled back on hiring this spring, after rising gas
prices cut into consumer spending and Japan's March 11 earthquake
disrupted supply chains. That slowed U.S. auto production.

Auto output has rebounded in the past couple of months and gas
prices have come down from their peak in early May. Those trends
likely boosted growth in the July-September quarter to about 2.5
percent, economists predict. That's an improvement from the 0.9
percent annual rate in the first six months of this year. But it's
not enough to spur much job growth.

Employers have added an average of only 72,000 jobs per month in
the past five months. That's far below the 100,000 per month needed
to keep up with population growth. And it's down from an average of
180,000 in the first four months of this year.

In September, the economy generated 103,000 net jobs. That was
enough to calm recession fears, but it wasn't enough to lower the
unemployment rate, which stayed at 9.1 percent.